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Monthly Digest | February 2021

Analyzing the key trends, events, and factors that drove market behavior in February 2021. Let's explore the pages of February 2021's trading chronicle together, unlocking the secrets that unfolded in the realm of stocks and investments.


February 01 2021

I’ve brought this up monthly since the inception of this page but the first trading days of each month usually has a bullish leaning. Over 75% of the time.


No one is buying the far OTM options on this anymore. We should see the same violent moves on this stock.


Second thing so I don’t have to keep going over this. Silver can only hit around 10-12% during the day. There is a circuit breaker on all futures. However the miners. Do not.


AG is up 40% again


"If tariffs and restraints on trade are good for a country, then why not indeed for a state or region? The principle is precisely the same. In America's first great depression, the Panic of 1819, Detroit was a tiny frontier town of only a few hundred people. Yet protectionist cries arose-fortunately not fulfilled-to prohibit all "imports" from outside of Detroit, and citizens were exhorted to "buy only Detroit." If this nonsense had been put into effect, general starvation and death would have ended all other economic problems for Detroit's."


I’ve gotten questions about free trade lately and it’s effects.


I wrote a piece on it a few years ago - FEE free trade experiment


We are getting rejection off of this level. A sign for the bulls.






By the way natural gas is up 11% today.


Currency traders. The yen looks majorly set to for a move here.


February 02 2021

GME short interest fell to 53% thanks for playing game over. ime to GTFO. This will revert right to the break out zone. My main thought about this is that I hope regular people come to the realization why this worked the way it did not because they think a bunch of people got together




Why was the set up perfect? Shorting something with over 100% s/o is stupid


If you push against that at all the stock can move violently. Now you’ve figured out a good entry technique. Now figure out how to sell it at the right time


What happened to the silver rally?


Silver margins increased with volatility. The market is as pointed out this weekend 1.42 trillion dollars. But hey what do I know.



So I kept getting questions from people - “When do the shorts have to cover?”


I kept saying they don’t have to


Which they don’t


Now I understand what you were talking about. These people think that days to cover means that the shorts have to cover in that amount of days...


And even though everyone corrected some of these guys they kept their tweets up leaving disinformation up for everyone


I’m not going to dive in to shorting on here. There are many good sources on this. Not to mention any broker besides robinhood that ACTUALLY lets you short so you can understand the process.


Physical premiums haven’t gone down


The battle begins



Here is your lesson in short selling. The thing that I hope people grasp is the fact that short seller actually

Unearth a lot of fraud in the market


Everyone knows the Enron story - Who figured out that they were screwing over the public first... short sellers.


The main point is that everyone is dumb money. The hedge funds included and maybe more so. It’s up to you to understand all the angles of this market.


I see a lot of you are using Blockfi now. What an edge. I have to thank @buylowstayhigh though.


This is interesting. Silver stopped right at the main pivot point


Volatility ranges will be very wide this year. If we stay above the primary pivot at 22. We could hit 33


Thats a lot of new shares


Dollar bouncing off of the R1 pivot


February 03 2021

“in the book Flash Boys, by Michael Lewis, the author takes aim at the inefficiencies of Reg NMS, writing that only sophisticated entities such as high-frequency trading firms and banks with dark pools are poised to take advantage of them. I believe that the core of Lewis’s argument does address the issue of inefficiencies in the market. However, where he and I differ is the availability of those inefficiencies. Lewis argues that because those specific inefficiencies are only available to a select few, the game of investing in the market is “rigged.” It is my contention, as someone who has generated superior risk-adjusted returns over several years (my performance is on full display for readers in Chapter 3), the overall market is inefficient, and the opportunities created from this state are far from exclusive. In my experience, the primary barrier to entry is knowledge (and certainly not access, or a starting account of unobtainable riches, or connection to insiders willing to provide illegal-to-trade-upon information). A lack of knowledge can always be rectified through education. This education need not come from schools—in my lifetime, I have also been educated by mentors, books, military deployment, news articles, conferences, idea dinners, people of all walks of life, art, psychology, philosophy, serendipity, and rigorous observations before/ while/ after actually trading. The Global Macro Edge will outline opportunities in many different aspects of the market. The following chapters will outline the process used to discover and benefit from them. It is my goal by writing The Global Macro Edge that, instead of perpetuating a sense of melancholy about some falsely perceived lack of upward investment mobility, we empower readers to take action and help reconfigure how they approach their investments. I will do this by walking readers through the process that I, an individual who has never had a job on Wall Street, used to responsibly and incrementally utilize a risk budget of $ 100,000 to generate over $ 3 million in profits for myself over a six-year period from 2010 through the end of 2015. These results are verified from my brokerage statements by an established third-party auditor in Chapter 3. All of this trading was done from my living room, hotel rooms, and other places I was able to port my trading workstation. It is my hope readers will conclude the game is inefficient and ripe with opportunity, but far from rigged.”


— The Global Macro Edge: Maximizing Return Per Unit-of-Risk by John Netto, Denise Shull, et al.


It’s interesting to think that they have convinced the public that stocks falling=evil! Being able to buy something at a valuable level is horrible! So when it goes up we are winning. When it goes down it’s manipulation.


Cotton could be the major outperformer in 2021. I keep saying "it is all dumb money" but why?



Whatever was the leading crop of last year farmers plunge in to heavily. With corn and soybeans majorly outperforming cotton will take up less acreage. Not that Cotton did not do well. Most of the farmers that I work with cut down on corn crops this year in favor of soybeans. Right before corn took off. This is all part of the cycle.




Natural gas - Exports out of the united states. We are close to hitting a new high. This is the one major change in the nat gas market since 2016. This is interesting because a lot of countries have stopped exporting natural gas to these levels


BTC. We went over the system this weekend and why I was still long.

This is beautiful. We are still seeing ETH leading as well which is very risk on for crypto. Also when the dollar is holding up but dollar sensitive assets are stronger. That is a good sign that the commodities might win this round again.


AD line is very close to a new high today. A roll over here would tell us something. A new high would tell us something. Patience


This has been a good roadmap for the market.


Junk bonds. The riskiest part of the bond market. 20-30 year gov bonds. The safety trade


As the blue line leads, it says the market is in risk on mode. As it lags, risk off. This morning it just made a new high


Soybeans


Soybean Meal. Today its getting above the 10 EMA. Fundamentally ags could run further in 2021


The Nok has been one of my main currency holdings for awhile. I have been trying to find a new entry. This is very close to it




Europe


China


US


Copper, aluminum and steel miners


US financials


Eruope Financials


japan long term


Brazil


Russia


This should slow me to share this with you guy. Let me know if it won’t let you watch it. But, don’t take my word for it. Listen to what Tony Greer has to say about this situation - "Money Incineration" in Stonks, "Champagne and Caviar" for the S&P 500



February 04 2021

There are stores in my area that call me when they have something no one will buy and it’s silver. So they give me it for super cheap. At the end of the day the melt value is EXACTLY the same - 99.9



The vix is ruthless. 100% move reversed in a matter of days.


For the first time since COVID-19 hit #gasprices, the national average is poised to surpass year ago prices in the next 24 hours. $2.46/gal today, $2.464/gal one year ago. Gas buddy data.


Coffee prices are tied to BRLUSD prices most of the time. When we see that coffee prices are holding up well even though the Brazilian real is in a down trend



This is a sign that Coffee prices could head higher.


Just to clarify, that’s not an indicator at the bottom. That’s the Nasdaq advance decline which is invisible so the red line above that should be there is gone. The blue Line that you see is a moving average




All signs pointing up still. Yes that sounds crazy, that is the market. Week 1 of each month is usually bullish.


Cotton made a major move today


February 05 2021

“Between stimulus and response there is a space.  In that space is our power to choose our response.  In our response lies our growth and our freedom.”

-Victor E Frankl


Learning feels like work to most of us. Learning how to learn can illuminate our lives and create confidence. Most of the time when humans are fearful it is because of a lack of understanding. Even in a bad situation, knowing the steps to get out of it can be incredibly helpful. This obviously transfers in to trading.


Learning feels like work to most of us. Learning how to learn can illuminate our lives and create confidence


Most of the time when humans are fearful it is because of a lack of understanding


Even in a bad situation, knowing the steps to get out of it can be incredibly helpful. This obviously transfers in to trading.


Very short read but it can help you to start the journey. Arguments between people constantly consist of straw man arguments these days. Understanding how to debate and communicate will only help all of us


LostToolsOfLearning-DorothySayers
.pdf
Download PDF • 212KB

There is a reason why trends exist. There is a reason why humans are easily led in certain directions.


Hegal created the Hegalian dialectic for this reason


Problem, reaction, solution.


Ever since the days of Edward Bernays we have led the publics reaction through news outlets


Page one in his book. Bernays was also Freud's nephew. Using his influence and the influence from the book the crowd to mold public opinion




Adam Curtis made a great documentary with him where he brags about all of these things before he dies for the BBC.


4 great books on this subject in case you want to dig deeper.



3 pushes to a low. A higher low that created an inverted head and shoulder bottom. Now it is breaking out.


Now we have the whole set up. Fundamental and technical.


Russell new high. "It's a bull market"




Cancelling the pipeline is bullish oil. You cant compete with transfering oil using gravity. If you do it another way you burn tons of fuel transporting it which will drive the cost of oil higher


I think anyone can see this but mainstream publications are saying the opposite


The cost of this gets passed to the consumer.


Exxon on the other companies will come out on top. Exxon just spent 3 billion on a system to help companies manage their carbon footprint.


They will lobby hard in the future to be in charge of all of this and big oil will become big green and the people will have no clue that it even happened.


March lumber another new high.


FDX the main transportation stock finally looks ready to turn around


The most risk on sector is at a new high. Like I keep saying, I cant get too bearish until this breaks down or oil or copper or small caps. Im just not seeing it


ZB 30 year bond... still falling


Futures traders. Orange juide has a very bullish fundamental set up. Just put in a double bottom


Frong month corn


2022 corn


This is a crazy rare set up when the ag markets are in contango. These far out contracts will catch up and it might be violent. We are barely at the high from 2020 in the 2022 contract.



Very few people understand how and what is going on with the system. Chris Cole knows it better than anyone


Watch his interviews. Read his papers


Hope you all had a good week. I’ll write the weekend report when I have time.


Futures account ended the week at a new high after take back January. Basically meaning I was up 21% in Jan and ended up being up 6% to end the month. Just cleared that high to end the week


Catastrophic stop (meaning the cost if all stops are hit) is 19% which is tighter than January. First week of February was a 16% gain.


January with all the volatility it was at 29%


February 06 2021


February 07 2021

  • $TWTR 12.3%

  • $CSCO 5.6%

  • $LYFT 9.1%

  • $NET 9.8%

  • $EXPE 7.7%

  • $GDDY 8.2%

  • $HUBS 9.1%

  • $SPG 8.1%

  • $ENPH 16.2%

  • $MAT 9.9%

  • $UBER 8.2%

  • $DIS 5.0%

  • $ZG 12.5%

  • $ILMN 6.7%

  • $DXCM 9.9%

  • $YETI 8.9%

  • $CGC 12.4%

  • $CRSR 22.0%

  • $GT 8.4%

  • $COTY 17.2%


Implied moves for earnings.





TLT against SPY weekly


 KRE against spy






Small caps AD line


Equal weight SPX on bottom. SPX on top


Common stock AD volume










High win rate system


Very bullish week - next week





Hard red winter wheat futures





Coffee the brazilian real has put major pressure on this one. That can change at any time


Lumber curve looks very similar to corn

















ETH against BTC



Added chart, Posted the wrong indicator.


something TA traders need to stop doing


Calling every triangle a wedge. It is very important to understand that when you are in an uptrend. Every pattern is most likely a continuation pattern. If you are in a down trend every pattern has a higher probability of being a continuation pattern


Japan has been a major winner. 31000 next target


Anyone able to code indicators on here? I have a new one I need some help with


February 09 2021

Want to hear a crazy price prediction for oil this year that my fundamental model just came up with? - 89


By the end of 2021, OPEC would have to change what they are doing to change the trend


In the short term (1-2 months) - 62




I know it’s not a commodity many people trade but there are nickel miners


I keep hearing that this looks exactly like 2020 lol. Lets look at the difference.


KRE the same as 2020 or different


Small caps the same or different


EEM the same or different


Copper the same or different


Biotech. The same or different


Breadth the same or?


Equal weight SPX on the bottom with a higher high now. Does this look the same or? In Feb it put in a lower high. There is a reason for going through all of these weekly


JNK to TLT the same or?


I have been trying to get my thoughts more organized which has led me to this brain model. This will be helpful


That’s ruthless and it looks like the vix


There is a reason



February 10 2021

Will be looking in to picking up some more corn. Dec 22.


Platinum is on fire. Literally.


Sugar


Yen ABC right to the 200 day. Nice set up





Soybean crush gray line soybeans blue line




February 11 2021

Ready for 22 dec corn.


Natural gas looks fucking amazing fundamentally over the next 10-12 months.


Crude chart by cornerstone futures. Amazing


Looks like a vix pop is coming


Still have the same thought that any dips will be short lived. AD line is confirming that outlook



For you stock traders. Plug is set up


Defense


XME metals and mining


FCX and CLF continues to be our favorite holding from that one


XHB


Weights


COPX copper miners


OIH



HAL RIG NBR being our picks


XBI I would be stupid if I did not bring up my biotech call. It has been an awesome trade. It could easily continue to lead the way and we will stay long until we get a sell signal. However, it is not my favorite US sector for 2021.


SILJ


FSM, NGD, AXU, AUY, PAAS being our picks from the etf


LIT another sector we like but we are sticking to broad exposure for now


EEM



Russian fertilizer company. Companies, are where I am focused. Ag in general and a few nickel miners... NILSY being the main one


Vietnam. The currency is called dong. Enough said


URNM


Anyways I am doing a write up for 2021 today So I am going through some of these. I wanted to point to some of the sectors Im long or interested in. You see a theme that we are headed in to a stagflationary period.


Even the US sectors, I will start rotating those out of the united states at some point as well


Oil majors are also a great area to pay attention to right now


XOM, COP, OXY, MRO is our focus areas


And yes I have been pounding the table for awhile on the bottom in energy.



I am not sure if XOM is where it takes off. However, I think that this time will be looked at as a generational buying opportunity in the sector.


One more. I think most traders will fight the last battle. I think they will constantly go after banks in any draw down.


Which will lead to the banks having a great recovery


The big banks are much healthier then they were years ago


12 February 2021



Industrials. This rally reminds me of the April, may, june rally


Very hated. A lot of cash on the sidelines



"What are the characteristics of bad traders? They have no process.They make their decisions emotionally and are incredibly impulsive, which is why they are swayed by panic and end up buying near highs and selling near lows."

- John Netto


"The interesting thing about this is that you can fade yourself


The opposite of a bad trader is a good trader


Sometimes not losing is every bit as important as winning."

- John Netto


13 February 2021

Futures portfolio-Performance: Ended the week at another new high. 16% on week one of feb. week two was 19.2%.


This is abnormal but that’s Trend trading. Take advantage of the major market moves but be ready to give some of it back.


Catastrophic stop widened to 23% as volatility expanded


When gains come easily we have to realize that they can always leave just as easily.


I think some of these ags are going to make a major gap at the open. This gap is buyable